But it was Thompson's plan for the business that Wall Street wanted to hear, after Thompson replaced Carol Bartz last year. Yahoo recently said that it would lay off 2,000 employees, whose savings will be felt over the next 12 months as employees serve out their employment periods. The streamlined costs, meanwhile, are designed to provide Yahoo with a 20 percent profit margin, excluding traffic and acquisition costs, which the company can use to fund further investment.

Yahoo reported revenue of $1.22 billion, up 1 percent from a year ago; revenue excluding traffic and acquisition costs also rose by the same amount to $1.08 billion.

"Our model assumes our business can and will grow going forward," Thompson said during a conference call with analysts.

Thompson emphasized that it was necessary to cut, the first pillar of the plan. Although Yahoo's myriad products generate more revenue than starting up new businesses, "it does not mean that we should do everything that we currently do," Thompson said.

"Yahoo had been doing way too much for too long, and had only been doing a few things really, really well," Thompson said.

In its place, Thompson said, Yahoo would be "regularly defining what we don't do," he said.

Thompson said that the plan to rebuild Yahoo has five pillars. First, Thompson said that 50 Yahoo properties would be cut, although he did not say which ones they would be. Those would include businesses that do not contribute to engagement and revenue. Second, Yahoo would concentrate resources and prioritize those businesses, such as Sports, Commerce, and Mail, which do generate revenue.

Yahoo named former PayPal executive, Sam Shrauger, and current Yahoo executive, Mollie Spilman, to co-lead a new consumer commerce business unit on Monday. The unit will be focused on "delivering engaging and personalized consumer commerce experiences which will connect consumers to marketers and merchants.". Thompson himself formerly ran the PayPal business for eBay, and in one slip referred to "PayPal" when he mean to use the word "people".

Third, Yahoo will shift engineers to Commerce as well as its "best and brightest Yahoos" to areas of innovation. Fourth, Yahoo will make its properties more nimble and less costly to run. Fifth, Yahoo will leverage its vast stores of data to improve ROI, although Thompson did not say how. And sixth, Thompson said that Yahoo would curtail R&D spending on properties that were owned and operated in partnership with third-party publishers.

Mark Hachman Mark joined ExtremeTech in 2001 as the news editor, after rival CMP/United Media decided at the time that online news did not make sense in the new millennium.
Mark stumbled into his career after discovering that writing the great American novel did not pay a monthly salary, and that his other possible career choice, physics, required a degree of mathematical prowess that he sorely lacked.
Mark talked his way into a freelance assignment at CMP’s Electronic Buyers’ News, in 1995, where he wrote the...
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